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1. Pending home sales. "Pending home sales in April disappointed, unchanged from March and down 22.6% YoY."
2. Global deflation. "A global deflation shock is coming. It's one of the more interesting aspects of human psychology that we were all watching stretched delivery times intensely in 2021 and 2022, but now that the reverse is happening and this will drive goods deflation, no one's talking about it."
3. Q2 GDP (I). The US economy grew by 1.3% QtQ in Q1, above the advanced estimate of 1.1% and below Q4's 2.6%.
4. Q2 GDP (II)."The increase in the first quarter primarily reflected an increase in consumer spending that was partly offset by a decrease in inventory investment."
5. Q2 GDP (III). "While the change in GDP will be mostly ignored as it is a very stale data point, there may be some attention to the price index and core PCE, both of which came in slightly higher than expected: GDP Price Index 4.2%, Exp. 4.0%, up from 3.7% in Q4; Core PCE Q/Q 5.0%, Exp. 4.9%, up from 4.4% in Q4."
6. Corporate profits. "If you exclude Federal Reserve 'profits' in the national accounts, corporate profits, as a share of national income, finally shrank last quarter, a positive development."
7. Jobless claims (I). "The current report indicates a weekly uptick of 4,000 to 229,000. The 4 week moving average was unchanged at 231,750. Continuing claims, with a one week delay, declined -5,000 to 1.794 million."
8. Jobless claims (II). "The four-week average of claims is about 0.14% of the labor force, well below the 0.3% average we've seen in the first month of all recessions dating back to 1970...For us to see claims reach even a 0.2% level, the four-week average needs to rise to 333K. For 0.28%? 466K."
9. Unemployment vs. recessions. "From a Nowcasting standpoint, the current unemployment rate picture is inconsistent with imminent recession."
10. Unemployment vs. Fed cuts. "Looking back at past few Fed cutting cycles, there’s some historical precedent for Fed cutting rates with <4% unemployment, but not when there was high inflation ... in all instances shown, unemployment continued to rise as cuts were underway."
11. Chicago Fed National Activity Index. The index "rose to +0.07 in April from –0.37 in March, pointing to pickup in economic growth. The index is a weighted average of 85 indicators of growth in national."
12. Kansas City manufacturing. "May [Kansas City Fed] Index up to -1 vs. -9 est. & -10 in prior month … new orders, shipments, and production all improved but are still contracting; prices eased considerably from 32 to 16; average workweek fell into contraction; employment rose and jumped into expansion."
13. 2011 debt ceiling. "2011 showcases the potential for volatility around the debt ceiling debate; risk sold off and longer-duration govvies rallied and despite the ceiling being raised at the last minute, US sovereign debt was downgraded below AAA a few days later."
14. Dollar vs. FX reserves. "Typically, declines in the dollar coincide with greater demand for FX reserves, as other countries try to limit their currency’s appreciation. But this has singularly failed to happen so far in this cycle."
15. Dollar vs. commodities. "But the recent fall in the dollar has not stimulated any extra demand for commodities or led to higher prices."
16. AAII sentiment. "AAII bulls up some, bears down some, but overall levels remain 'boring'."
17. Buybacks. "Stock buybacks by corporate clients decelerated last week, but are still strong."
18. Equity flows. "Equity flows have moderated after a two-year period of inflows."
19. Equity allocations. "Equity allocation from BofA's private clients stands at 59%."
20. Mutual funds cash allocations. "'With many [long only’s] bumping up against their cash ceilings, we are seeing these dollars .. rotate sharply into supercap tech .. and act essentially as cash .. I do not see the .. rotation .. ending anytime soon,' giving $SPX 'higher than .. anticipated floor'."
21. Mutual fund performance. "33% of large-cap mutual funds are outperforming their benchmarks YTD."
22. Mutual funds vs. megacaps. "Mutual Funds were, at the start of this quarter, running big underweights in all the stocks that have performed the best: NVDA, AAPL, MSFT, TSLA, AMZN, GOOGL."
23. Hedge funds vs. megacaps. "Hedge funds...have boosted their tech holdings to 15.5% of their overall single-stock net exposure, up from 9.7% at the start of the year."
24. Hedge funds vs. semis. "Lots of semis buying. And still most of it was been short covering...and not so much long buys."
25. Hedge fund trading flows. "Overall Prime book is modestly net bought YTD, driven by long buys outpacing short sales. Flows in Single Stocks and Macro Products converged and were both net bought over the past few weeks."
26. Hedge fund long/short ratio. "Hedge funds have generally maintained a defensive posture. Overall Book Long/Short ratio is currently in the 3rd percentile vs. the past five years."
27. Hedge fund sector tilts. "Hedge fund net sector tilts relative to past decade…as of March 31, 2023."
28. Utilities fwd PE. "Forward EPS for S&P 500 Utilities sector (orange) continues to march higher as forward P/E (blue) has rolled over rather swiftly (which is also being ‘helped’ by some reversal in ‘P’)."
29. SPX margins. "We expect net income margins to contract 60bp in 2023."
30. Day 100. And finally, “today is the 100th trading day of the year. S&P 500 up more than 7% YTD as of now and this would be the best start to a yr since 2021 and 2019 before that. When >7% on day 100? Rest of yr up another 9.4% on avg and higher nearly 89% of time.”
Thanks for reading!
Always a good read. Thanks.